by James A. Bacon

The latest Bureau of Labor Statistics data highlight significant gains in employment and labor-force growth in the Commonwealth, said the Governor’s Office in a press release this morning. The data, said the statement, underscores Virginia’s “resilient and dynamic labor market.”

Unemployment dipped slightly to 3.0%, 1.1 percentage points below the national rate of 4.1%. The labor-force participation rate of 66.0% remained significantly higher than the 62.5% national participation rate.

“Virginia’s labor market continues to demonstrate resilience and growth, with a strong increase in nonfarm payrolls, a growing labor force, and low unemployment,” said a statement attributed to Governor Glenn Youngkin. “Our commitment to business-friendly policies, reducing costs, and fostering innovation has created an environment where both Virginia companies and Virginians can thrive.” 

Look, this is modestly good news, and I don’t want to rain on anyone’s parade. I think Youngkin’s pro-business policies are beneficial. I would love to credit them for the positive economic results. And if I had to wager, I would bet that the numbers would support the proposition that Youngkin has been a better steward of the economy than his predecessor Ralph Northam.

But these numbers by themselves don’t prove anything.

If the Governor wants the public to look beyond the press-release boilerplate and really credit his policies, he should persuade a credible third party such as the Strome School of Business at Old Dominion University (which publishes the annual State of the Commonwealth reports) to conduct a systematic analysis.

The Governor must do two things: (1) Show how Virginia’s key economic metrics compare to national averages, and (2) show that Virginia’s relative performance vis a vis those metrics improved faster (or declined less) on his watch than on his predecessor’s. Even those comparisons are tricky because any state’s economic performance depends to a large degree upon its industry mix. The performance of particular industries depends as much upon national economic policies and macro- and microeconomic trends as anything that governors do.

As a case in point, the Virginia Hospital and Healthcare Association issued a press release this morning noting that healthcare employment was booming in Virginia through the 4th quarter of 2023. Healthcare employment of more than 407,000 individuals represented a 4.7% increase from the previous year and was well above the pre-pandemic peak of 381,000.

Does Virginia’s governor deserve credit for a surge in healthcare employment? Maybe he does if his name is Ralph Northam, who signed a major expansion of the Medicaid program… but maybe not, if you consider the impact of the massive spending increase on taxpayers.

It gets complicated.

Virginia has an unemployment rate lower than the national average? Super. But it’s always had a lower rate. Even under Northam.

Virginia has a higher labor participation rate than the national average? Wonderful. But it always has.

Virginia has a lower poverty rate than the national average? Groovy. But it has for decades.

Virginia has a higher median household income than the national average? Cool. But that’s nothing new.

The Democrats’ strategies for improving the lives of Virginians are spending more money, enacting regulations, and redistributing wealth. The Republicans’ argument (which I share) is that those things erode the economic growth that creates prosperity and opportunity. In the absence of extensive data, however, it’s impossible to prove that one policy mix outperforms the other.